City gets good news for taxpayers

Thursday

Jun 19, 2008 at 2:00 AM

PORTSMOUTH — The city announced that Moody's Investors Service, one of the nation's largest bond rating agencies, has upgraded the city's bond rating from Aa3 to Aa2, citing strong financial management, continuing growth, a large tax base and low debt burden as positive factors.

PORTSMOUTH — The city announced that Moody's Investors Service, one of the nation's largest bond rating agencies, has upgraded the city's bond rating from Aa3 to Aa2, citing strong financial management, continuing growth, a large tax base and low debt burden as positive factors.

"The upgrade to the Aa2 rating is driven by the city's healthy economy, which appears to be bucking national economic trends as development activity continues in this sizeable and diverse tax base and a continuing trend of a strong and stable financial position, evidence by five years of general fund balance exceeding 30 percent of revenues. The Aa2 rating also reflects the city's low overall debt burden," Moody's said.

"This is another milestone in our efforts to continue to improve our economic standing," said City Manager John Bohenko. "This upgrade will save Portsmouth taxpayers thousands of dollars annually in reduced borrowing costs and once again demonstrates to the national and international business communities that the city of Portsmouth is a sound financial investment."

Standard & Poor's Group, another municipal bond credit rating agency, affirmed the city's rating of AA, citing strong financial performance, ongoing commercial and industrial development, strong property tax base, and moderate to low debt burden as positive factors. Moody's upgrade from Aa3 to Aa2 puts Portsmouth in the same position as the S&P designation. Both agencies have upgraded the city's bond ratings three times over the past 10 years.

The city received competitive bids on June 12, for an $8,700,000, 20-year bond issue. Bids for the bonds were accepted at the office of First Southwest Company in Boston. Morgan Keegan & Co. Inc. was the winning bidder on the bonds with an average interest rate of 3.789 percent.

Proceeds from the bond issuance will be used to finance various capital projects: $1.3 million for the purchase of land to relocate Fire Station 2, $3.65 million for construction of Station 2, $2.5 million for streets, sidewalks and bridge reconstruction, $750,000 for a fire apparatus and $500,000 for school improvements.

"I want to thank the City Council, whose continued leadership and endorsement of our financial plan has made this upgrade possible, and Finance Director Judie Belanger and her staff for their efforts leading to this day," Bohenko said.

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